The government has issued a notification stating that the Goods and Services Tax Network (GSTN) will now come under the Prevention of Money Laundering Act (PMLA). This means that the GSTN, which manages the GST portal, will be required to share information with the Enforcement Directorate (ED) and the Financial Intelligence Unit (FIU) under the PMLA Act. If the ED and the FIU discover any suspicious foreign exchange transactions involving a GST taxpayer, they will also share this information with the GSTN. Additionally, GST-related offenses such as fraudulent input tax credits and fake invoices will be covered under the PMLA.
The GSTN is an IT system that oversees the GST portal and provides shared infrastructure and services to the central and state governments, taxpayers, and other stakeholders involved in implementing GST. Some of the functions performed by the GSTN include facilitating registration, forwarding tax returns to the relevant authorities, calculating and settling Integrated GST (IGST), matching tax payment details with the banking network, analyzing taxpayers' profiles, and matching invoices.
Apart from the ED and the FIU, other agencies that are required to share information include the Competition Commission of India, Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India, Serious Fraud Investigation Office, and Director General of Foreign Trade. This list is periodically updated.
The PMLA was enacted to combat the financing of terrorism and drug trafficking. It also allows for the confiscation of properties derived from or involved in money laundering.
The author is a Chartered Accountant with 2 decades of experience into Accounting, Taxation, Auditing, Risk & Compliance, Credit Controls, Due diligence. Currently, the author is the founder and managing partner at RRL Global services.
CAclubindia
